European Gas Prices Rise After Global Supply Risks Resurface

(Bloomberg) -- European natural gas prices rose for a second session as supply risks returned to the market. 

Benchmark futures settled 2% higher, with a spike in afternoon trading. The move underscores persistent volatility in prices, even as the contract settled lower for the week. 

Europe is increasingly reliant on the global market for gas, and several risks have emerged in recent days. Chevron Corp is starting planned maintenance on one of three trains at its Gorgon liquefied natural gas export complex in Australia, with work expected to last well into August. 

In Texas, almost a million utility customers were still without electricity Friday after Hurricane Beryl plowed through Houston earlier in the week. Some areas near the Freeport LNG export facility have been restored, while other areas remain offline.

Meanwhile, southeast Europe continues to battle severe heat waves, boosting reliance on gas to power air conditioning.

Unplanned outages and concerns about remaining pipeline flows from Russia have been behind much of the volatility in Europe’s gas market this year. Energy Aspects Ltd. analysts have said they expect gas prices to remain sensitive to news of global LNG outages. 

Still, Europe’s stockpiles are now 80% full, higher than usual for the time of year. Stronger renewable generation and steady flows from Norway have also helped to keep concerns about supply risks in check.  

Dutch front-month futures, Europe’s gas benchmark, closed at € a megawatt-hour in Amsterdam. 

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